MFAA calls for certainty as tax reforms pass Senate and House

By Julian Barnes

25 June 2026

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MFAA calls for certainty as tax reforms pass Senate and House

The Mortgage and Finance Association of Australia has called for greater certainty for brokers following the passage of the Federal Government's housing tax reforms through both the Senate and the House.

The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 passed the Senate on Thursday (25 June), with the last-minute changes being rubber stamped by the Lower House by 98 to 39 votes shortly after.

The legislation introduces sweeping changes to capital gains tax (CGT) and negative gearing, including limiting negative gearing for residential property investments to new builds and replacing the 50 per cent CGT discount with a cost base indexation model and a 30 per cent minimum tax rate on future capital gains from 1 July 2027.

It also confirms a ban on new limited recourse borrowing arrangements (LRBAs) for residential property within self-managed super funds (SMSFs), while existing arrangements and contracts already in train will be grandfathered.

MFAA calls for certainty

With the legislation now largely settled, the Mortgage and Finance Association of Australia (MFAA) said its focus had shifted from advocacy to ensuring brokers and their clients understand how the reforms will be implemented.

Throughout the legislative process, the association made submissions to the Senate inquiry, backed the Council of Small Business Organisations Australia's 'Fair Go' campaign and raised concerns over the proposed CGT changes, discretionary trust reforms and the decision to prohibit new residential SMSF borrowing arrangements.

The government has since announced some capital gains tax carve‑outs for small businesses and start‑ups, following sustained backlash from some businesses.

MFAA executive of policy Naveen Ahluwalia said certainty would now be critical.

"Mortgage and finance brokers facilitate more than 81 per cent of Australia's residential home lending and are already helping clients navigate an increasingly complex policy and economic environment,” she said.

"With the legislation now passed, our focus turns to ensuring brokers and their clients have the certainty and clarity they need to move forward with confidence."

Ahluwalia said the government should now prioritise practical guidance to ensure the reforms were implemented smoothly.

"The Government now has an important opportunity to provide timely guidance and work closely with industry to ensure implementation is clear, practical and avoids unintended consequences for borrowers, investors and small businesses."

SMSF concerns remain

Despite the legislation passing Parliament, the MFAA said it was disappointed by the decision to prohibit new residential property lending through SMSFs.

The measure was introduced following negotiations between the Albanese Government and the Australian Greens and will prevent new residential property loans written under an LRBA structure 45 days after the legislation receives Royal Assent.

Ahluwalia warned the change risked undermining investor confidence at a time Australia continued to face housing supply challenges.

She said: "We remain concerned that restricting new SMSF lending for residential property removes an established and well-regulated pathway for investment that has supported housing supply for many years.

"Australia needs more homes, and policies should encourage sustainable investment and provide confidence for those looking to invest in housing."

While the residential property restriction has attracted significant industry attention, LRBAs will remain available for other eligible assets, including certain shares and unit trusts, while borrowings relating to commercial property are unaffected.

Refinancing arrangements that maintain or refinance pre-commencement borrowings will also be grandfathered, while acquisitions entered into before commencement will also be protected - even where settlement occurs after commencement.